Trust in Financial System Falls Back to 2009 Levels

Americans’ trust in the financial system dropped in June to the lowest point since the financial crisis, driven by waning faith in national banks. And that’s before the Libor scandal drew widespread attention in recent weeks.

Just 21% of Americans trust the financial system, the fewest since March 2009, according to the latest quarterly measure by the Chicago Booth/Kellogg School Financial Trust Indexreleased Tuesday. The worsening was driven largely by a drop in trust of national banks, which fell two percentage points to 23%. Trust in local banks rose four percentage points to 55%, while trust in credit unions increased five percentage points to 63%.

“This suggests that the national banks may be ‘too big to trust,’” said Luigi Zingales, a professor at the University of Chicago’s Booth School of Business and co-author of the index.